Potential Impacts of E15 Expansion on Fuel and Agricultural Commodity Markets
March 2026
FAPRI-MU Report #01-26
Published by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri (MU), 200 Mumford Hall, Columbia, MO 65211. FAPRI–MU is part of the Division of Applied Social Sciences (DASS) in the College of Agriculture, Food and Natural Resources (CAFNR).
Download Full ReportFuel volumes and RFS compliance costs
The ethanol expansion assumed here causes use to rise in each year. Assuming a quarter percent (0.25%) increase in the average ethanol inclusion rate each year causes +264 million gallons in 2026 and +1.368 billion gallons in 2030 relative to the baseline path. These and all other numbers presented here are averages of many model simulations to cover a variety of market conditions, such as with different crop yields and petroleum prices.
The RFS requirements are not assumed to change, so the additional ethanol demand makes it easier to meet the overall mandate and indirectly helps to meet other mandate components, such as for biomassbased diesel. The price of Renewable Identification Numbers (RINs), or RFS compliance certificates, is consequently lower. The price of conventional RINs associated with corn ethanol fall. Moreover, because biomass-based diesel can compete with ethanol to meet the overall mandate under certain conditions, the biomass-based diesel RIN price also falls. The falling use of biomass-based diesel is a result of this competition: more ethanol demand pushes out some biomass-based diesel for meeting the set RFS requirements.
Table 1. Changes in fuel volumes and RIN prices
| Fuel use, million gallons | 2026 | 2027 | 2028 | 2029 | 2030 |
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| RIN Prices, dollars per RIN-gallon | 2026 | 2027 | 2028 | 2029 | 2030 |
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These results suggest a potentially important change in the relative costs for buyers who consider purchasing ethanol or gasoline to blend into retail fuels. The ethanol fuel price to buyers rises by $0.16/gallon in the first year and $0.59/gallon in the fifth year. This increase suggests that future buying decisions in this scenario might not take place at prices comparable to what we see in markets today.
Whereas ethanol typically sells at a discount relative to gasoline now, encouraging blending, the ratio of the ethanol buyer price to the gasoline buyer price would rise by 5 percentage points in the first year and 18 percentage points in the last year. The ratio of ethanol-to-gasoline buyer prices in the last year rises from under 60% to 75%, on average. This change would reduce the incentive to blend ethanol. This result stresses the importance of considering why E15 expansion takes place.
Figure 1. Ration of ethanol-to-gasoline buyer prices
Agricultural sector impacts
Rising ethanol demand leads to more production. The use of corn for ethanol and coproducts rises This link is softened by ethanol exports, which fall as domestic price rises.. Similarly, the reduction in biomass-based diesel use leads to less demand for soybean oil and other feedstocks. Consequently, the price effects are opposite, with corn price rising and soybean oil price falling.
Government costs associated with agricultural commodity programs fall in these estimates. The effect on corn price per bushel is smaller than the effect on the soybean price per bushel, but the tie to payments also depends on the bushels of production and where prices are relative to policy triggers. In this case, given the baseline, government outlays are more sensitive to corn price than soybean price. A different starting point, such as with lower soybean price or higher corn price, could reverse the taxpayer effects.
Table 3. Changes in agricultural prices, farm income, and program costs
| Feedstock prices, marketing year | 2026/27 | 2027/28 | 2028/29 | 2029/30 | 2030/31 |
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| Government outlays by | 2027 | 2028 | 2029 | 2030 | 2031 |
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